Energy bosses in the UK are to hold emergency talks with the government after record high gas prices last week refuelled calls for an urgent intervention to avert “an enormous crisis” next year.
The business secretary, Kwasi Kwarteng, is expected to lead the virtual meeting on Monday to address fears that the winter energy crisis may escalate after new price highs across Europe last week.
Stephen Fitzpatrick, chief executive of energy supplier Ovo, told the BBC there had been “nowhere near enough urgency” from the government, even as soaring wholesale costs threatened “an enormous crisis for 2022”.
Gas prices surged last week to 450p a therm, around nine times higher than a year ago, surpassing the record high set in October this year as supplies from Russia slowed despite rising demand to beat the winter cold.
“We’ve seen this energy crisis unfold now for the last three months and we’ve watched as energy prices have spiked, fallen back, and spiked again,” Fitzpatrick said.
“We’ve had more than 30 bankruptcies in the sector, we’ve had millions of customers forced to change supplier. The cost to the consumer has already been more than £4bn.”
He added: “We haven’t seen any action from the government or from the regulator. There’s an acceptance that there’s a problem, but nowhere near enough urgency to find a solution.”
Nigel Pocklington, the chief executive of supplier Good Energy, told investors last week that “no one in the industry is immune” to the surge in market prices, and called on the government to “support the industry at large in navigating these short-term challenges to protect bill-payers and those that serve them”.
“This is a national crisis,” Pocklington said. “Wholesale gas and power prices have increased to unprecedented levels over the last three weeks, creating an extremely difficult operating environment for every business in the industry.”
Energy bosses are expected to call for the government to offer help to hard-hit households by cutting VAT from bills, and moving green support levies into general taxation. They are also expected to discuss new ways to manage the cost of energy company failures, which has affected millions of households since September.
The government also faces growing calls from opposition parties to take action against the energy crisis, which has caused the steepest ever winter bill hike in October and is likely to lead to even larger increases in April when the regulator is due to reset its energy price cap.
The Liberal-Democrats have calculated that households are likely to pay a total of £100m more for their gas and electricity between Christmas and the new year compared with last year.
Ed Davey, the…
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